Confronting the Ridicule of Counsel for the Bank

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See also these articles:

The Right to Foreclose & the UCC

Weinstein Article NJ Law Journal

SearchforNegotiability Ronald Mann (1)


If you file a claim or affirmative defenses along with your answer denying everything, you will often be met with a motion to strike the affirmative defenses or claim. The reason is simple, once the court agrees that the matters you alleged in your pleading are in issue, you are automatically entitled to discovery on those issues. And that is why I continue to say that the more aggressive you are in the beginning of litigation the more likely you are to get win or get a settlement early in the process. Pleading lack of consideration raises the issue of what happened with the money? Once that is in issue, your discovery questions and requests can be directed at that. Once the foreclosers are forced to open up their books and records, my experience is that they will fold. They generally don’t have a cancelled check or wire transfer receipt from anyone in their “chain.”

Here is what was submitted in one case in opposition to the motion to strike the affirmative defenses of the homeowner:


  1. Counsel for the Plaintiff wants this court to ignore the defenses of the Defendants on the basis that the theory of the case advanced by said defendants is “Absurd.”
  2. Defendants agree that there are patent absurdities and unexplained mysteries in this case.
  3. Plaintiff has alleged that it is a “holder” and has not alleged that it is a “holder in due course.” And it has not alleged the source of its authority to claim “rights to enforce.” By definition this means they admit that Plaintiff is not a purchaser for value, in good faith without knowledge of the Borrower’s defenses.
  4. If Plaintiff (or anyone whom Plaintiff represents) actually purchased the loan for value, in good faith and without knowledge of the borrower’s defenses, they would say so. That would make them a Holder in Due Course. Florida statutes protect the Holder in Due Course allocating the risk of signing documents without receiving consideration to the borrower. It would end the debate — eliminating nearly all of the borrower’s defenses by definition. So where is a holder in due course in this court proceeding?
  5. Defendants concede that anyone who signs a document assumes the risk of liability (even if they didn’t get the loan) that it might be used as a negotiable commercial instrument (cash equivalent) and that if an innocent buyer of the loan documents who was acting in good faith without the knowledge of the borrower’s defenses acquires such loan documents those documents can be enforced and that the borrower is limited in potential remedies to pursue satisfaction from the loan originators, mortgage broker etc.
  6. But Plaintiff is not alleging it is an innocent buyer. It is not even disclosing for whom the  the loan documents are being enforced. By trick of logic, Plaintiff wants this court to “assume” or “presume” that some actual creditor or owner of the loan has given the Plaintiff the right to enforce. But Plaintiff is not providing any allegation or proof, despite numerous requests as detailed in the affirmative defenses, as to the identity of the real creditor nor any facts or documents that how show the “real creditor” is imbued with the status of holder in due course,, creditor or “owner” of the loan.
  7. Instead they allege status of “holder” without any clarity of how they acquired the loan documents nor the basis of their authority to enforce the loan documents.
  8. Counsel for the Plaintiff wants to be treated as a holder in due course where the defenses of the homeowner are ignored regardless of whether they have merit. Counsel is attempting to elevate the status of the Plaintiff to treatment as a holder in due course, while the only allegation is the the Plaintiff is a “holder.”
  9. Being a holder does not automatically entitle anyone to enforce a document. If it were otherwise any delivery service would be able to stop by the courthouse and file a lawsuit on the papers they are carrying. A “holder” must have “rights to enforce.” And these rights come from the actual owner of the loan, whom they refuse to disclose.
  10. The “absurd” conclusion that there was no consideration at the “closing” of the “loan” arises from the the perfectly logical progression of reasoning stemming from the lack of consideration at every step in the chain, upon which Plaintiff relies. If there does exist a transaction in which the loan was (a) funded by the designated lender and (b) transferred for value at each step of the “assignment” process, then it is impossible for SOMEONE not to be a holder in due course. But the Plaintiff refuses to disclose in its pleading the identity of the holder in due course or anyone else designated as the creditor or owner of the loan.
  11. If the Plaintiff wants this court to enforce the loan documents, by its own pleadings it does so as a mere “holder.” That means that Plaintiff is subject to the defenses of the borrower arising from the closing. Plaintiff stands in no better shoes than the “originator” of the loan whom Defendants allege was not the actual lender.
  12. If the Plaintiff wants this court to to enforce the loan documents, it must prove that it has the actual loan documents, and it must prove that it has the right to enforce those documents not by presumption but with facts. And Defendants are permitted to raise the issue of consideration and inquire in discovery as to the reality of the transaction at the time of the loan.
  13. If Plaintiff wishes to state that it has the right to enforce the loan documents, even though it is a mere holder, then it must have been given those rights to enforce from the actual creditor. That is a step that Plaintiff seeks to avoid for reasons that will be flushed out in discovery and at trial. Defendants take the position that the their is no real creditor or real owner of the loan in any sense of the words, in the entire chain of “ownership” relied upon by the Plaintiff. If that is untrue, then Plaintiff can simply provide proof of payment at each step of the original transaction and each step in which there was an alleged transfer.
  14. Plaintiff is attempting to rely upon presumptions which would lead to a conclusion that is contrary to the actual facts.
  15. The presumptions upon which Plaintiff intends to rely, as is obvious from their complaint, would lead the court to conclude that there was consideration at the “closing” and each “transfer” of the loan. Such presumptions are rebuttable for the precise reason that they exist for the sake of expediency. Ordinarily, before the era of “securitization” such presumptions reflected the actual facts. In this case, they do not.
  16. Defendants need not prove their case at this stage of litigation. They have raised bona fide issues. If the issues raised as defenses are completely devoid of any basis, then the court has remedies available. Defendants have requested proof of payment to support the closing documents and each “transfer” of the loan. Such requests are found in the fact pattern described in the affirmative defenses. Plaintiff refuses to show such proof, betting on this Court’s need for an expeditious result.
  17. The defensive pleading of the Defendants are sound and sustainable, as pled, because they must be taken as true for purposes of the hearing on the Plaintiff’s Motion to Strike.

6 Responses

  1. So without prejudice – now they get to start all over again.

  2. what is that???

  3. Unbelievable. Look at what a Judge allegedly doing in Texas


  4. I would first check to see if the counsel for the bank servicer whatever has an agreement with the bank servicer etc…. That they have under penalty of perjury verified evidence that there firm represents the true holder in due course and real party of interest.

    something like that


  5. You know and judges/court knows there are two sides to every argument. Surely by now the court can not close it’s doors on borrowers who pass muster and survive 12b motion and with all the other suits and ” investigations” that have gone on for over 5 ( FIVE) years or more since the housing BUBBLE proper discovery and abiding by its rules ( for BOTH sides)is the only equally fair way to handle this mess. It can only get worse and for those who obstruct the course of justice it’s your fault.

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